The Catholic Church used to be a powerful force - a real NATION with an army and political muscle.  Not any more.

For many years, the Pope ran Rome and Italy.  While some people claim the Vatican has been an independent country only since 1929 - that ignores the fact that for many years the Catholic Church ruled over what we call "Italy" today.  "Italy", as a political entity, hasn't been around that long.  At left shows the "Papal States"; the territory that the Catholic Church controlled militarily from about 754 AD to 1870 AD, with 164 different popes ruling over this territory as its king.  When Italy became a nation in 1870, they defeated the Catholic Army and the pope retreated to the Vatican Palace. In 1929, Italy promised to protect the Vatican and signed a treaty with them, recognizing them as an independent state, although they had been pretty much that the whole time.  Modern day "Italy" was born, and it relegated the Catholic Church to a mere religious organization.  Gone were their days of being a political entity.  The Vatican was, at one time, the most influential country in Europe as the strongest military and religious influence on most countries around it.  But modern day Italy destroyed that and stripped the Catholic Church of its former power, and stripped it of its military.  The Vatican no longer has the tools of power; an army, taxation, etc.

Had Italy allowed the Vatical to continue to go by its old name, they might have wanted to raise an army and return to their old glory.  Changing the name held a psychological advantage of encouraging the Papacy to accept their defeat and smaller territory.  Truth is, the people wanted a democracy, and the Papacy was no longer powerful enough to keep the public in line. 

Shalom,

Joe